Two of Atlanta's largest hospital systems are forming their own insurance company, with plans to sell Medicare Advantage, commercial and self-funded health plans in 2014.
Earlier this fall, Piedmont Healthcare and WellStar Health System announced they were jointly forming the Georgia Health Collaborative, as a way to share medical expertise and find economies of scale.
Now, amid delivery and payment experiments and much 2014-related trepidation for both insurers and providers nationwide, the two not-for-profit health systems are partnering to offer their own plans as an HMO -- possibly selling some plans on Georgia's health insurance exchange.
"We believe our industry's future relies on successfully implementing a population health model of care -- delivering disease prevention and care management with higher quality at lower costs," Piedmont president and interim COO Gregory Hurst said a media release. "Launching a health plan helps us move more quickly toward that future."
"Health systems that have a broader geographic reach and larger population base will be best suited to react to and sustain operations regardless of future federal and state legislative outcomes," Reynold Jennings, president and CEO of WellStar, said.
The Piedmont-WellStar insurance collaborative is being created with guidance from Evolent Health, a Washington D.C.-based population health management consultancy formed by The Advisory Board Company and the University of Pittsburgh Medical Center (UPMC).
With some renewed interest in integrated systems like the Mayo Clinic, Kaiser Permanente, UPMC and the Cleveland Clinic, Evolent is heavily promoting the idea of health-system-based health plans, as providers grapple with an uncertain financial future.
UPMC, a not-for-profit integrated health system and the dominant provider in western Pennsylvania, has operated a for-profit health plan as a subsidiary for more than a decade, and it now has about 1.7 million members. Pennsylvania's largest insurer, Highmark Blue Cross Blue Shield, has about 4.8 million members, and the growth of UPMC's health plan has helped spark some ongoing market battles.
"It was our goal to create a more competitive health insurance market that's long been dominated by Highmark's monopoly," UMPC spokesperson Paul Wood told the Pittsburgh Post-Gazette earlier this year. "And we succeeded."
The Piedmont-WellStar plan will be offered to the two health system's 35,000 employees and their family members. That, in addition to other plans it hopes to offer, will likely add another layer of competition to what's already a fairly competitive state health insurance market.
WellPoint Blue Cross Blue Shield of Georgia has about a 40 percent market share of the state's combined PPO and HMO markets, followed by UnitedHealthcare's 32 percent, according to the American Medical Association's analysis.
Piedmont's Ronnie Brownsworth, MD, has been named CEO of the newly formed health plan; a neurologist by training, Brownsworth previously worked as CMO at Saint John's Health System in Springfield, Missouri, where he also developed a health-system-based health plan.